HP set to sack thousands: analysts

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US tech giant Hewlett-Packard is expected to unveil a major
reorganisation as early as this week that could end up slashing as
many as 25,000 jobs, analysts say.

The move for the Silicon Valley group would be the company's
biggest shake-up since completing its controversial takeover of
Compaq Computer three years ago.

"Datapoints from an industry source suggest that the
much-anticipated cost cutting plan could be announced next Monday
and include a headcount reduction of 15,000 to 25,000," said
analyst Cindy Shaw at Moors and Cabot.

"The Street has generally been looking for a headcount reduction
of 5000 to 10,000 at the low end of the range and 10,000 to 15,000
at the high end of the range, although we believe there has been a
whisper number of 20,000 this week."

There was no immediate comment from the company based in Palo
Alto, California, known for its computers, printers and tech
services.

Speculation has run high that a major restructuring has been in
the works since chief executive Mark Hurd took over at HP in March.
Hurd, the former CEO of NCR, built a reputation for restoring NCR
into a money-making machine through cost-cutting.

The Wall Street Journal reported that Mr Hurd was likely
to unveil his restructuring tomorrow.

Brian Alexander, a senior analyst with Raymond James, said he
expected HP to cut about 10 per cent of its roughly 150,000-person
work force.

Mr Alexander estimates HP will make the cuts across all its
business segments, but that most will be in the division
responsible for corporate-oriented computer storage and server
products.

"They are still supporting old legacy (system) platforms, and
their cost structures are higher than their competitors," he said.
"Their operating margins in that area are in the low-single digits
and should be in the mid-to-high single digits."

There was no indication of how the cuts, if announced, would be
spread geographically.

In May, IBM announced cuts of up to 13,000 jobs, mostly in
Europe.

Many investors have been pressing HP to take dramatic steps to
ramp up its profitability.

And the company has already begun to act. It eliminated more
than 2000 jobs this year via voluntary buyouts, but Mr Hurd said he
needed more time to review the company's far-flung operations
before making any big changes.

Meantime, its PC business has turned around over the last year.
In its second quarter, the personal systems group reported an
operating profit of $US147 million ($A196.21 million), on $US6.37
billion in sales, up from $US44 million on revenue of $US6 billion
a year ago.